New Zealand businesses remained upbeat in September, although activity indicators weakened among those firms responding later in the month, as fuel prices rose sharply.
ANZ’s latest Business Outlook survey showed headline confidence easing 2 points to 51.9 percent in September.
That means optimists still comfortably outnumbered pessimists, despite near constant economic and geopolitical uncertainty.
Firms’ expectations for their own activity – usually seen as a better guide to where the economy is heading – were virtually unchanged at 47.9 percent.
But reported activity, compared with a year ago, fell to 10.8 from 16.4 in August.
The averages also masked a clear split between early and late responses.
Most businesses replied around the start of September, while about a quarter responded after ANZ sent a reminder three weeks later.
In between, the Dubai spot oil price jumped from about US$100 a barrel to a peak of US$128, before easing to US$111 by 22 September.
Own-activity expectations stood at 52 among early respondents but fell to 36 among those replying later in the month.
The split was even sharper in firms’ recent experience, where retail activity went from a net 17 early in the month, to -13 later.
Meanwhile, the economy-wide employment reading compared with a year ago swung from positive 5 to negative 23.
ANZ said the survey suggested “a renewed confidence impact” from higher oil prices, although late-month activity readings remained well above the lows seen in March and April.
Investment plans held up, while residential construction intentions improved through the month.
The results varied widely by sector as once again, manufacturers were among the most upbeat, with confidence at 78.7 and own-activity expectations at 69.6.
Construction also strengthened, but retail investment intentions were just 2.2 and employment intentions were negative 10.9.
One factor likely to please the Reserve Bank was the oil-price rises seemingly having little effect on firms’ inflation expectations, which were almost unchanged at 3.25 percent versus 3.26 percent in August.
The net share of those firms planning to raise prices actually fell to 48.4 percent from 51.0 percent.
Cost pressures remain stubbornly high, with a net 81.9 percent expecting increases, while expected wage growth over the next year rose to 2.83 percent.
ANZ said the wage measure posed a mild upside risk to the Reserve Bank’s forecasts, while spare capacity may be shrinking faster than the central bank expected.
ANZ described the picture as a “bumpy recovery”, with momentum in manufacturing and parts of construction offset by weaker readings elsewhere.
It said how firms responded to renewed uncertainty would help determine how the economy finished the year.